Lauren Templeton on Her Uncles’ Value Investing Strategies

Lauren Templeton on Her Uncles' Value Investing Strategies

 

Lauren is the author of Investing the Templeton Way: The Market-Beating Strategies of Value Investing’s Legendary Bargain Hunter, and a Portfolio Manager. She is the niece of Sir John Templeton.

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Lauren Templeton, Lauren Templeton Capital Management – ‘John Templeton Legendary Value Investor’s Market Beating Strategies’

 * Background

o Father’s example – saved 50% of income and invested

o Taught her to pick a ‘stock a month’ as a young lady and covered bedroom wall with the certificates

o After college, Sir John Templeton seeded her hedge fund with $30M

* Sir John Templeton’s 15 personal attributes

** Self reliance

** Reasonable risk taker

** Sense of stewardship

** Drive to diverse

** Bargain hunting mentality

** Broad social and political awareness

** Flexibility

** Large time to study

** Ability to retreat daily (mid-day ocean walk, lunch, nap)

*** Extended network of friends

*** Patience

*** Thought control

*** Positive thinking

*** Simplicity

*** Great intuitive powers

* Academic idea of homo economicus – always making the rational decision in a given situation

o People are not always rational (Las Vegas odds, lotteries, credit card balance and money in a savings account)

o James Montier ‘The Little Book of Behavioral Investing’

* X System (Dr. McCoy)

* Quick process, short cuts

* C System (Mr. Spock)

* Logical, think through

* Crisis Happens – Time of opportunity

o Post September 11th, 2001

* Airlines stocks plummeted, with Sir John, bought the 3 that dropped 50%

o Swine flu epidemic of 2009

* Mexican airport operators hit extremely hard

o Over time, stocks 14% more volatile than fundamentals justify

* Sir John – guidelines

o Hold reserves

o Develop a ‘wish list’

o Place good till cancel orders 20% below current price

o Be optimistic about the innovation and ambition of others

o Managing money away from Wall Street led to better erturns

o Investor returns do not match market returns.

* (3) broad categories applicable to investing

* Traditional (exploit information)

* Quantitative (better model)

* Behavioral (Irrational, herding, fear)

* Sir John core beliefs

o Avoid countries trending toward socialism

o Favor savers &enterprising citizens

o Well positioned firms with growth are best long term

* Q&A

o European Financial Crisis?

* Bought Richemont (luxury watches)

* Emerging market citizens hungry for status items

 

Value Investor Conference: Omaha, Nebraska

Dustin Hunter, SunRift Capital Partners (www.sunriftcp.com)

(These notes are to the best of my recollection.)